(The Center Square) – Taxpayers should pay more for public pension plans in New York.
State Comptroller Thomas DiNapoli announced on Thursday that the average employer contribution rate for the employee pension system will increase from 11.6% to 13.1% of payroll for the 2023-24 fiscal year. The employer contribution rate for the Police and Fire Pension Plan will increase from 27% to 27.8% of payroll for the next fiscal year, which begins in April.
The ERS and PFRS are part of the New York State and local retirement system, which covers retirement and disability benefits for public sector workers as well as death benefits for their survivors.
In a statement, DiNapoli noted that the pension plans are performing well, citing the 2021-22 fiscal year ended with a funded ratio of 102.9% as proof. However, “recent national and global economic volatility calls for caution” in the years ahead.
“As we move forward with our conservative investment strategy, we remain focused on delivering stable, long-term returns for New York’s public employers and workforce,” he said. “Uncertainty may be a constant in financial markets, but the rates announced today will help ensure that New York’s pension fund continues to be one of the strongest and best-funded in the country. ready to provide retirement security for generations to come.”
The assumed system efficiency will remain the same at 5.9%. Only Kentucky has a supposedly lower rate.
Last month, the state announced that the pension fund was showing a return of 9.5% for the 21-22 fiscal year. However, the first quarter of FY22-23 saw a return of -8.2%. At the time, DiNapoli pointed to the Russian invasion of Ukraine, historic inflation and supply chain issues as the reason for the decline.
The value of the pension fund at the end of the first quarter was $246.3 billion.
More than 3,000 state and local organizations participate in pension plans. In fiscal year 21-22, the system paid out $14.7 billion in benefits to retirees and survivors.
As of June 30, New York had 44.7% of its pension fund invested in publicly traded stocks. Cash, bonds and mortgages make up 22.4%, while private equity makes up 15% of the fund. The state has invested 12.1% of the fund in real estate and assets, and the rest is in “credit, absolute return strategies and opportunistic alternatives”.